/ Social Sector / by Sebastian Schienle

An unconditional basic income — An idea becomes reality

Our social security systems in Germany are characterized by the guiding principle of “sanction and support.” Every individual should receive adequate support provided that he or she contributes his or her share. At the same time, any form of abuse should be prevented. However, effectiveness and efficiency often fall to the wayside, and bureaucracy runs rampant.

Take Hartz IV, Germany's social welfare benefit, for example: While it was originally designed with the goal of combining individual benefits from various social welfare pots into a fixed basic provision, it instead produces mounds of paper. The average file of a Hartz IV recipient has 650 pages; legal notices and assessments end up being 70 pages or more. At the same time, more than one in every three Hartz IV recipients win their cases after objecting to sanctions that were imposed against them. In the tradition of German thoroughness, we check and control down to the very last detail, but apparently frequently with questionable results.

The underlying reason for this is the image of the recipient as a petitioner who can hardly be trusted and who must be instructed to lead a better life. This corresponds to one of the things most criticized about an unconditional basic income, an idea that is currently the topic of much discussion: If there is no incentive to work — the most frequently expressed fear — then society will fall into a state of idleness and laziness.

Yet the notion of a basic income is currently being hotly debated. In a number of countries, the approach is set to find real application: Initial pilot trials are being prepared on a local level in the Netherlands; Finland and Canada want to develop pilot projects as well, and a referendum on introducing an unconditional basic income will be held in Switzerland in June. In Germany, Deutsche Telekom CEO Timotheus Höttges recently spoke in favor of a basic income.

While in these times of greater employment insecurity, proponents of a basic income anticipate, above all, more security (and thus more willingness to take risks, entrepreneurial spirit, and innovation) as well as more state efficiency, critics question the financial feasibility and lack of an incentive system. No matter which line of reasoning you follow, the one thing that both sides of the debate have in common is that there is no sound evidence on the actual impact.

Non-profit GiveDirectly now hopes to fill this void. For several years now, GiveDirectly has been supporting village residents living in existential poverty in Kenya and Uganda by providing direct monetary payments known as unconditional cash transfers. In a number of situations and countries this approach has shown that the poor do not squander these transfers, but instead use them in thoughtful and deliberate ways in order to get out of poverty.

There are now plans to conduct a meaningful study on the impact of long-term, regular payments that are sufficient for covering the recipients’ basic needs — i.e., an unconditional basic income. To do this, GiveDirectly plans to put around 30 million USD into launching a project that will support around 6,000 recipients in Kenya for more than 10 years — accompanied by in-depth scientific research.

We believe that this is a convincing and worthwhile approach. If the idea of a basic income does in fact catch on, then it will turn the tables on fighting poverty. Bureaucracy will give way to efficiency. Control will give way to trusting in the free decisions of individuals. And petitioners — whether in Kenya or in German job centers — will be recipients who are seen as equals who can take charge of their own destinies.

More information about the project can be found here:

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